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Annual Chart ofPublic Policies andCorporate Governance2018

Message from the Board of Directors 2

Identification 3

1. Public interest underlying the corporate activities 4

2. Activities Developed 4

3. Public Interest and Related-Party Operations 4

4. Public Policies 5

4.1. Governmental Initiatives 6

4.1.1. Strengthening and Enhancement

of the Family Agriculture 6

4.1.2. Foreign trade 7

4.1.3. Regional and Territorial Development 7

4.1.4. Simplification of the Life of the Company

and Citizenship: “Bem Mais Simples Brasil” 9

4.1.5. Fishing and Fish Farming 9

4.1.6. Promotion of the Rights of the Disabled 10

4.1.7. Promotion of the Decent Work andSolidary Economy 11

4.1.8. Sustainable Agribusiness 12

4.2. Funds for Costing of Public Policies 15

5. Economic and financial impacts of the

operationalization of public policies 16

6. Internal Control Structure and Management of Risks 18

7. Risk factors 18

8. Economic and Financial Data 18

8.1. Comments on the Operational Performance 19

9. Stock Ownership Structure 19

10. Corporate governance policies and practices 20

10.1 Other Committees 21

10.2 Management members’ compensation

policy or practice 21

IND EX

Message from the Board of DirectorsEven in a challenging year, we operate with total confidence in the delivery of results compatible with the estimates disclosed and the commitments assumed, since we know the competence and engagement of our employees.

We closed the year 2017 with adjusted net income of R$11.1 billion and adjusted return (RSPL) of 10.7%, against 7.5% in 2016. Part of this result was attained by the efficient control of administrative expenses, which fell 3.1% in one year, despite the inflation (IPCA) of 2.95% and by the substantial reduction of allowances for loan and lease losses (ALLL) expenses, by R$6.3 billion (19.9% against 2016).

Our revenues from services and bank fees increased by 9.0% in relation to 2016, which shows the successful development of our customer relationship strategy, mainly with the use of new technologies. The materialization of this result is in our adjusted efficiency ratio, which reached 38.1%, against 39,7% in 2016 and in the improvement of our Basel ratios and core equity tier one, which increased to 19.6% and 10.5%, respecti-vely, in 2017.

The review process of the Corporate Strategy involved different publics. After extensive reflection, we agreed to work in the period 2018-2022 in five performance outlooks – Financial; Clients; Processes; People; and Sustainability –, formally assuming the purpose “to take care of what matters to people”. This means to assist in the attainment and preservation of what is important for our clients, shareholders, employees and the whole society.

Supported by the achievements of 2017, we believe that, in 2018, the transformation and complexity of the business environment will intensify. Therefore, the improvement of the client’s experience and the invest-ment in innovation will continue to be assumptions of our performance. The higher efficiency in the operations and processes, the growth of the use of artificial intelligence in data analysis, plus specialization of the employe-es and the constant search for the clients’ convenience to use our client services will be fundamental pillars in the evolution of profitability.

We also believe that the acceleration of the economic recovery will be the driving force for the growth of our loan portfolio, particularly, for individuals, micro and small sized companies and agribusiness. The effects of the strengthening of the economic activity will reflect on the increase of businesses with insurance, means of payment, capital market and asset management.

We would like to thank for the dedication and engagement of our employees and the confidence of our clients and the society, which guide us towards the Vision “To be the company that provides the best experience for people and to promote society’s development in an innovative, efficient and sustainable way”.

Banco do Brasil S.A.Annual Chart of Public Policies and Corporate Governance 2018

Fabrício da Soller Paulo Rogério Caffarelli

Chairman of the Board of Directors Banco do Brasil’s CEO

Scope

Annual Chart of Public Policies and Corporate Governance 2018

In accordance with article 8, item I and VIII, of Law 13,303, dated June 30, 2016, the Board of Directors subscribes the Annual Chart on Public Policies and Corporate Governance refer-ring to the fiscal year of 2017.

Paulo Rogério Caffarelli (CPF 442.887.279-87)Position: CEOBernardo de Azevedo Silva Rothe (CPF 776.890.627-68)Position: Vice-President of Finance Management and Investor Relations (CFO)

Beny Parnes (CPF 729.641.627-00)Daniel Sigelmann (CPF 021.484.577-05)Fabiano Felix do Nascimento (CPF 822.817.934-00)Fabrício da Soller (CPF 912.223.979-00)Julio Cesar Costa Pinto (CPF 579.940.641-91)Luis Otávio Saliba Furtado (CPF 926.046.687-34)Luiz Serafim Spinola Santos (CPF 093.068.627-68)Paulo Rogério Caffarelli (CPF 442.887.279-87)

KPMG Auditores IndependentesName: Marcelo Faria Pereirae-mail: [email protected]: (61) 2104-2400

Bernardo de Azevedo Silva Rothee-mail: [email protected]: (61) 3493-5601

00.000.000/0001-91. NIRE 5330000063-8

Federal Government

International

Brasília/DF

Joint Stock Corporation

Mixed Capital

Finance/Banks

Release Date: 05/30/2018

Publicly Traded

Annual Chart Underwriting Adminis-trators

Board of Directors underwriters of the Annual Chart

Current Independent Auditors:

Investor Relations Director - DRI

Registry (CNPJ)

Headquarters

Type of Capital

Sector

Identification

Type

Controlling Shareholder

Corporate Type


Corporate Governance and Public Policies

1. Public interest underlying the corporate activities

Law No. 13.303/16, in its article 8, items I, III and VIII, sets forth the explanation of the commitments for attain-ment of objectives of public policies by the mixed-capital company, in response to the collective interest which justified the authorization for its creation, with clear definition of the funds to be used for this purpose, as well as the disclosure of relevant information, in special those related to the activities performed, control structure, risk factors, economic and financial data, management comments on the performance, corporate governance policies and practices and description of the composition and compensation of management. This information is detailed below.

Law No. 4.595/64 introduced the Brazilian Financial System, composed of the National Monetary Council, Central Bank of Brazil (Bacen), Banco do Brasil (BB), National Bank for Economic and Social Development (BNDES) and other financial institutions. The same standard defined Banco do Brasil as financial agent of the National Treasury and principal instrument of execution of the loan policy of the Federal Government, being responsible for the financing of commercial, industrial and rural activities, disclosure and guideline of loan, performance of the foreign trade policy, among other assignments. With over 200 years, BB operates on responsible basis to promote social inclusion through the creation of jobs and generation of income.

Agribusiness is one of the principal sectors of the Brazilian economy, being fundamental for the growth and development of the country. Banco do Brasil finances the costing of production and the sale of farming products, foments rural investments such as storage, processing, manufacture of agricultural products and modernization of agricultural machines and implements, in addition to the compliance of rural properties to the environmental legislation. Accordingly, BB supports the Brazilian agribusiness sector in all the stages of the production chain.

BB offers to Micro and Small Companies (SME) solutions of working capital, financing of investments and foreign trade, in addition to many other options related to cash flow, security, pension and services. The several segments of Companies, including Individual Microentrepreneurs (MEI), are offered from financial alter-natives to business models that promote the transition to an inclusive economy.

In the financing to foreign trade, BB operates public policy instruments of production development, entrepreneurship, social and financial inclusion, including the Income Generation Program (Proger) Export and the Export Financing Program (Proex), in which it is exclusive agent of the Federal Government.

Additional information on the history of Banco do Brasil and its main products and services is available at sections 6 and 7 of the Reference Form (at bb.com.br/ir > Downloads > Reference Form).


2. Activities DevelopedBanco do Brasil operates mainly in the bank retail. Through strategic partnerships, affiliates and subsidiaries offer a wide range of products and services. Its business may be grouped into six segments: (i) Banking; (ii) Investments; (iii) Management of Funds; (iv) Insurance, Pension and Capitalization; (v) Means of Payment; and (vi) Other Segments.

To offer differentiated solutions and strengthen the bound, BB segments its clients in three large markets: Individual, Companies and Public Sector. The knowledge of the markets permits the development of proposals of value adequate to the profiles of clients: model of service, channels, portfolios of products and services, prices and tariffs, approach of integrated communication and, when applicable, specific brand.

Additional information on the main products and services offered by Banco do Brasil is available at sections 7.2 and 7.3 of the Reference Form (at bb.com.br/ir > Downloads > Reference Form).

3. Public Interest and Related-Party OperationsAligned with the public interest, the Bank develops activities that meet public policies and its social purpose pursuant to articles 5 and 6 of BB’s By-Laws:

Banco do Brasil, important agent of the economic and social development of the country, seeks to foment the economy and growth, operating in support to the public management in the promotion of improvements in seve-ral sectors. To maintain the growth of its loan portfolio with stability in the quality of assets, it seeks to establish partnerships that assure the same values of integrity, reputation and respect to the community and environ-ment.

The Bank operates with public policies through financial services available to its clients, also participa-tes in programs, projects and initiatives of public management, offering customized solutions that assist in the coverage of social demands. Accordingly, the Bank carries out transactions with the Federal Government, controlling shareholder, which generate financial effects on its Equity and Result.

Section 16 of the Reference Form (available at bb.com.br/ir > Downloads > Reference Form) presents the main information on agreements held between BB and its related parties. Among the relevant transactions with the controlling shareholder (Federal Government), we highlight the agreements for raising of capital in

Article 5. The Bank will contract, as stipulated by law or in the regulations, directly with the Federal Govern-ment or with its intervention:I – Carry out the duties and services pertinent to the function of a financial agent of the National Treasury and other functions assigned to it by law;II – provide financing of government interest and carry out official programs by investing funds from the Federal Government or any nature; and,III - provide guarantee for the Federal Government.Sole paragraph. The activities provided for by this article are conditioned, as the case may be, to the following:I – the availability of corresponding funds to the Bank and the setting out of a corresponding interest payment;II – the prior and formal definition of the terms and proper interest payable in connection with the funds to be invested in case of equalization of financial charges;III – to the prior and formal definition of the terms and assumption of risks and of remuneration, never lower than the costs of the services to be rendered; and,IV - to the prior and formal definition of the term to fulfill the obligations and the penalties for incompliance.Article 6. The Bank may engage the performance of duties, services and transactions that are assigned to the Brazilian Central Bank, provided that the provisions of the sole Paragraph of article 5 of these bylaws are followed.

official financial funds, used in loan facilities to meet the public policies.

For each financial fund, there is qualitative and quantitative information that meets the recommendation of CVM/SEP Circular Official Chart No. 02/2018, on:

a) details and conditions of official financial funds used to meet the most relevant public policies in the fields “subject matter of the agreement” and “amounts involved and balance”;b) sources and conditions of financing in the field “subject matter of the agreement”;c) estimates of the impacts of the public policies in the field “interest rate charged”; andd) process of price formation and applicable rules in the field “show the strict interchangeability of the agreed conditions or appropriate compensatory payment”.


4. Public Policies

4.1. Governmental Initiatives4.1.1. Strengthening and Enhancement of the Family Agriculture

The Pluriannual Plan (Plano Plurianual), or PPA, set forth by Article 165 of the Brazilian Federal Constitution, is the planning tool that establishes the guidelines, objectives, and targets of the federal government to enable the implementation and management of public policies, direct the strategic reach of the governmental action, direct the establishment of priorities, and assist in the promotion of sustainable development.

The Ministry of Planning, Development and Management (MPDG), together with other bodies and entities of the Executive Branch, is responsible for coordinating the processes of preparation, monitoring, evalu-ation and review of the applicable PPA, and release methodology, guideline and technical support for its mana-gement (Law No. 13.249/16 ruled by Decree 8.759/16).

Banco do Brasil is inserted in the PPA as executor agent of governmental public policies, through finan-cing funds (governmental), other initiatives (own funds) and realization of fixed investments of the Bank, aligned with the Programs, Objectives and Goals previously defined by the MPDG and by Sector Bodies (OS) which correspond to the executor ministries of the public policies.

The governmental initiatives under the PPA should maintain consistency with the targeting of the Corporate Strategy of Banco do Brasil.

The purpose of the Program is to expand the access to and qualify the loan instruments, protection of produc-tion, guarantee of minimum prices and guarantee of income for Family Agriculture.

Granting loan to family farmers (Pronaf)

The purpose of the National Program for Strengthening Family Farming – Pronaf is to foment the gene-ration of income and prize the use of family labor in rural properties, as long as the prerogatives of the Manual of Rural Loan – MCR have been complied with.

Banco do Brasil develops actions focused on strengthening the Pronaf, mainly the following:

Banco do Brasil, important agent of the economic and social development of the country, seeks to foment the economy and growth, operating in support to the public management in the promotion of improvements in seve-ral sectors. To maintain the growth of its loan portfolio with stability in the quality of assets, it seeks to establish partnerships that assure the same values of integrity, reputation and respect to the community and environ-ment.

The Bank operates with public policies through financial services available to its clients, also participa-tes in programs, projects and initiatives of public management, offering customized solutions that assist in the coverage of social demands. Accordingly, the Bank carries out transactions with the Federal Government, controlling shareholder, which generate financial effects on its Equity and Result.

Section 16 of the Reference Form (available at bb.com.br/ir > Downloads > Reference Form) presents the main information on agreements held between BB and its related parties. Among the relevant transactions with the controlling shareholder (Federal Government), we highlight the agreements for raising of capital in

official financial funds, used in loan facilities to meet the public policies.

For each financial fund, there is qualitative and quantitative information that meets the recommendation of CVM/SEP Circular Official Chart No. 02/2018, on:

a) details and conditions of official financial funds used to meet the most relevant public policies in the fields “subject matter of the agreement” and “amounts involved and balance”;b) sources and conditions of financing in the field “subject matter of the agreement”;c) estimates of the impacts of the public policies in the field “interest rate charged”; andd) process of price formation and applicable rules in the field “show the strict interchangeability of the agreed conditions or appropriate compensatory payment”.

a)Guideline to the branches on the possibility of covering the loan needs of family farmers;

b)Adoption of the model of operation through partners and special agreements contracted as Commercial Correspondents – Agribusiness Segment, which includes the lines of working capital for input purchase and investment and facilitates the origination of financing proposals from digital channels;

c)Simplification, de-bureaucracy and digitization of the contracting and renewal processes for the costing and investment lines.

Banco do Brasil promotes actions of strategic support to the Family Agriculture, with emphasis on digital processes to streamline the process, thus fomenting the service to this public and reinforcing its histori-cal partnership with the Brazilian agribusiness.


The purpose of the Program is to expand the access to and qualify the loan instruments, protection of produc-tion, guarantee of minimum prices and guarantee of income for Family Agriculture.


The purpose of the National Program for Strengthening Family Farming – Pronaf is to foment the gene-ration of income and prize the use of family labor in rural properties, as long as the prerogatives of the Manual of Rural Loan – MCR have been complied with.

Banco do Brasil develops actions focused on strengthening the Pronaf, mainly the following:

a)Guideline to the branches on the possibility of covering the loan needs of family farmers;

b)Adoption of the model of operation through partners and special agreements contracted as Commercial Correspondents – Agribusiness Segment, which includes the lines of working capital for input purchase and investment and facilitates the origination of financing proposals from digital channels;

c)Simplification, de-bureaucracy and digitization of the contracting and renewal processes for the costing and investment lines.

Banco do Brasil promotes actions of strategic support to the Family Agriculture, with emphasis on digital processes to streamline the process, thus fomenting the service to this public and reinforcing its histori-cal partnership with the Brazilian agribusiness.

(a) Governmental Initiative Granting loan to family farmers (Pronaf)

i. goals (projected/actual) Goal projected in 2017: R$13.0 billion Performed in 2017: R$13.3 billion (Performed: 102.5%)

ii. investments made Not applicable. iii. costs incurred Funding, administrative and fiscal costs. iv. origin of funds involved, The main sources of funds for financings through the Pronaf are: - Agricultural Savings; - Demand Deposits; - HCDI; - FCO; - National Treasury.

v. estimate of the impacts of the The performance of public policies related to rural loanaforesaid public policies on the observes the compensation required to cover the costs invol financial performance of the issuer ved and the compensation of the financial agent.or declare that the analysis of financial impact of the aforesaid public policies has not been performed

(b) Process of price formation and The rural loan has free and controlled rates. The controlled rules applirules applicable to rates bear financial charges defined by the National Monetary establishment of tariffs Council (CMN) and allocators of funds.


4.1.2. Foreign trade

The purpose of the Program is to improve the instruments of official loan support to exports.

Financing to export of goods and services

The Proger Export is the loan facility backed by the Fund for Workers’ Assistance (FAT) to finance Brazilian Micro and Small Companies, representing an important support to companies that intend to expand or com-mence foreign trade operations. This support contributed to the creation and maintenance of jobs and genera-tion of income, assisting these companies to become more competitive and adequate to market requirements.

Aimed to increase exports by Micro and Small Companies, with creation of jobs, the Executive Council of the FAT – Codefat, through Resolution No. 330/03, introduced the line of Export Financing to Micro and Small Companies – Proger Export, in the scope of the Employment and Earnings Generating Program – Proger.

The participation of small and microcompanies in the export market has been relevant in the past years. According to data disclosed by the Ministry of Development, Industry and Foreign Trade, in 2014, the number of export companies reached 19,234, and approximately 50% of this total refers to Micro and Small Companies and 76% have made exports of up to US$ 1 million during the year.

(a) Governmental Initiative

i. goals (projected/actual)

ii. investments made

iii. costs incurred

iv. origin of funds involved, including sources of funds and conditions

v. estimate of the impacts of the aforesaid public policies on the financial performance of the issuer or declare that the analysis of finan-cial impact of the aforesaid public policies has not been performed

(b) Processo de formação de preços e rules applicable to establishment of tariffs


Goal projected in 2017: R$13.0 billionPerformed in 2017: R$13.3 billion (Performed: 102.5%)

Not applicable.

Funding, administrative and fiscal costs.

The main sources of funds for financings through the Pronaf are:- Agricultural Savings;- Demand Deposits;- HCDI;- FCO;- National Treasury.

The performance of public policies related to rural loan obser-ves the compensation required to cover the costs involved and the compensation of the financial agent.

The rural loan has free and controlled rates. The controlled rates bear financial charges defined by the National Monetary Council (CMN) and allocators of funds.


4.1.3. Regional and Territorial Development

The purpose of the program is to promote the regional development and the ordering of the Brazilian territory through the planning of the occupation and use of the space on sustainable basis and with territorial approach.

Financing of production channels (FCO – Corporate)

The Midwest Constitutional Financing Fund (FCO) was introduced by Law No. 7.827/89, in view of article 159, item I, subitem c, of the Federal Constitution. It is a fund of accounting nature whose purpose is to contribute to the economic and social development of the Midwest region, through the performance of financing programs to the production sectors.

Banco do Brasil, pursuant to article 13 of Law No. 7.827/89, is administrator of the FCO in conjunction with the Ministry of National Integration and the Superintendence for the Development of the Midwest (Sudeco).

The Corporate FCO presented a volume of contracted operations of around R$ 1.9 billion in 2017, totaling 10,083 operations. Compared to year 2016, there has been an increase of 32% in the volume of contracted operations.

Goal projected in 2017: R$2.9 billion

Performed in 2017: R$1.9 billion (Performed: 66%)

The amount of R$3.2 billion was disbursed in the period from January to December 2017.

Financial cost: TFC

Funds from the Midwest Constitutional Financing Fund (FCO).

Accumulated Profitability in 2017: R$43,0 million

The rates and business conditions are defined in legislation disclosed by the Central Bank of Brazil (Bacen). The charges (compensation of the financial agent) are defined by the Bank. They are factors that affect the price formation of the Bank: interest rates, default rates, taxes, compulsory collection rate, among other. By legal definition only tariffs provided for in the legisla-tion are permitted.




iii. costs incurred



(b) Process of price formation and rules applicable to establishment of tariffs


FCO - RuralIn the scope of the rural loan, with funds from the FCO - Rural, the object of the financing is fixed and semi-fixed investments, costing associated to investment project and farming costing.

Aimed to disclose the loan facility, its purposes, benefits and conditions, in addition to encourage its contracting, Banco do Brasil has historically implemented actions such as:

a)Establishment of partnerships with entities supporting the rural producers for dissemination of the program;b)Simplification and automation of processes of contracting of operations;

c)Technical Consultancy at Level of Portfolio - ATNC with companies that provide technical assistance to rural producers, for identification of the technologies and standardization of investment projects in the scope of the program.

FCO – Rural

Goal projected in 2017: R$4.5 billion

Performed in 2017: R$6.3 billion (Performed: 141%)


Funds from the Midwest Constitutional Financing Fund (FCO).

The performance of public policies related to rural loan observes the compensation required to cover the costs involved and the compensation of the financial agent.





iii. costs incurred





4.1.4. Simplification of the Life of the Company and Citizenship:“Bem Mais Simples Brasil”

The purpose of the program is to promote solutions for expansion of the Micro and Small Companies and the Brazilian Handicraft markets.

Granting loan for working capital for MPE

Banco do Brasil, in the capacity of part of Fundo PIS/PASEP quotas administrator, invests the funds from the Public servant fund program (Pasep) and of Own Account BB, in the form of mix of funds, so as to grant loan for working capital to Micro and Small Companies – MPE and individual entrepreneurs.

The performance of the product BB Working capital Mix Pasep since 2016 derives from the retraction of demand for loan, as result of the economic downturn, entrepreneurs’ prudence, lower consumption in view of the higher unemployment rate and reduction of the wage bill.

The funds available from Fundo PIS/PASEP have been fully invested by BB in the granting of working capital to MPE and individual entrepreneurs.

However, in view of Provisory Act No. 797/17, the Federal Government changed the rules of redemp-tion of balance by the participants of PIS-Pasep, resulting in the need to return to Fundo Pasep part of the funds invested in BB through the line BB Working capital Mix Pasep. Accordingly, the performance of the product BB Working capital Mix Pasep corresponds to the disbursements made up to 10/03/2017, in view of the suspension of contracting.




iii. costs incurred


Granting loan for working capital for MPE (BB Working capital Mix Pasep)

Goal projected in 2017: R$2.9 billionPerformed in 2017: R$1.6 billion (Performed: 57%)

Amount of R$1.6 billion disbursed in the period from January to October 03, 2017, date when new contracting in the line were suspended, in view of the measures of the Federal Government for redemptions of quotas by beneficiaries of Pasep.

Financial Costs:Funding Pasep: Reference Rate - TR + 6% p.a. - Own Funding: Average Rate Selic – TMS.Administrative Cost:Unit Cost: Contracting R$87.97 / Maintenance: R$11.01.

Mix of funds from the Pasep and from own Banco do Brasil S/A account.


4.1.5. Fishing and Fish FarmingThe purpose of the program is to foster the fishing and fish farming production on sustainable and competitive basis.

Granting of loan to fishermen and fish farmers

Banco do Brasil operates with all the publics of the fishing segment, from the small producers to large agribusi-ness companies, in the financing for the costing and sale of production.

In order to streamline the services to fishermen and fish farmers, Banco do Brasil implemented actions focused on the integration of the chain and granting of loan to producers including through production links, with formalization of partnerships with agents of the segment.

Fishermen and fish farmers have loan support by BB so that, on inclusive and sustainable basis, they can expand their production and foment the activity in Brazil.




iii. costs incurred


Granting loan to Fishermen and Fish Farmers

Goal projected in 2017: R$220.5 millionPerformed in 2017: R$107.8 million (Performed: 48.9%)

Not applicable.


The main sources of funds for financings are:- Agricultural Savings;- Demand Deposits.



Financial Result:Accumulated Profitability 2017: R$304.1 million.

The rates of charges depend on the macroeconomic scenario presented at the moment of contracting. The factors that affect the price formation are: interest rates, default rates, taxes, compulsory collection rate, among other.The tariffs are disclosed through the Table of Tariffs and Packages of Services. Changes of price and collection are disclosed at least 30 days in advance.


4.1.6. Promotion of the Rights of the DisabledThe purpose of the program is to promote accessibility and equalization of opportunities to the disabled in all the areas of life in society.

Financing of goods and/or services of Assisted Technology for the Disabled

BB Loan Accessibility was created in 2012, with the National Plan of the Rights of the Disabled – “Viver sem Limite” (Decree No. 7.612/11).

This loan facility, exclusive of Banco do Brasil, is destined to financing of goods and services of assisted technology focused on the disabled. The target public is composed of individuals with gross monthly income of up to 10 minimum salaries and limit of loan approved and in force in BB.

In view of the need to reduce the default rates of the portfolio, as well as mitigate risks of frauds and deviations from the purpose, in April 2016, operating improvements were implemented in BB Loan Accessibility, which brought greater security and quality to the portfolio.




iii. costs incurred


Financing of goods and / or services of Assistive Technology for people with disabilities (BB Loan Accessibility)

Goal projected in 2017: R$6.5 millionPerformed in 2017: R$6.5 million (Performed: 100%)

From Feb/2012 to Dec/17, R$392.9 million were disbursed and 57,304 operations were contracted.

Total Fixed Cost: R$174.0 thousand.

Demand Deposits received by the financial institutions, pursuant to Bacen Resolution 4.000/11.






4.1.7. Promotion of the Decent Work and Solidary EconomyThe purpose of the program is to foment the opportunities of work, employment and income, by granting loan to entrepreneurs’ activities and the oriented productive microloan.

Granting of Oriented Productive Microloan (MPO)

Banco do Brasil, in 2017, continued with the qualification of the base of operations and clients covered in the scope of the MPO, focused on the targeting of the operation through Movera, company of the Conglomerate, which operates in the sale of products of microfinance, whose operations began in 2015. Movera has enabled higher qualification in service provision, as well as expansion of loan access and financial inclusion of microen-trepreneurs.

Improvements in the operation conducted by Movera have been implemented, such as:

1. MPO Digital, tool for mobile device for entrepreneurs, which allows the analysis of the record stan-ding and loan, acceptance of operations and documents on a simplified manner, with agility and security.

2. MPO at Levels, where entrepreneurs obtain differentiated business conditions, such as term and compliance bonus, pursuant to the evolution of their loan experience in MPO. For granting of benefit, the com-pliance of the entrepreneur and the recontracting of MPO operations are monitored.

In line with the trends of digital transformation, the Microloan Agent “Verinha” was made available, the first digital microloan agent of the country which, through the Facebook and website Movera, offers content related to financial guideline and information on products and client service. In addition to an instrument of com-plementation of the guideline, she receives intentions of new business and conducts the prospection process.

In addition to the direct operation, the Bank conducted the operation of Interbank Deposit of Microfinan-ce (DIM), in the amount equivalent to R$550 million.



Granting Oriented Productive Microloan (MPO)

Goal projected in 2017: R$500 millionPerformed in 2017: R$413 million (Performed: 83%)



The performance observes the compensation required to cover the costs involved and the compensation of the financial agent.

The price formation of the line follows the criteria established in Administrative Rule MF No. 240, of July 9, 2012 and Administrati-ve Rule MF No. 570, of December 2, 2013.



iii. costs incurred







Amount disbursed in 2017 by BB: R$413 million.


Funds from the demandability of microloan (2% of compulsory demand deposits).

The performance observes the compensation required to cover the costs involved and the compensation of the financial agent.

The criteria for price formation are defined by Banco do Brasil S.A. as long as the limits regulated in specific standards of the PNMPO (National Program of Oriented Productive Microloan) are observed. The factors that affect the price formation of the Bank are: interest rates, default rates, taxes, compulsory collection rate, among other.

Granting Loan FAT Taxi Driver


The investments made by the Bank include partnerships in the contracting of operations with clients, as well as in commercial actions conducted with the representative entities such as, for example, the Unions and Cooperatives of Taxi Drivers, eviden-cing the market differentials of the loan facility with the promotion of job, employment and income through investment of funds from FAT, so as to prospect new operations for this loan portfolio. These actions are developed by the network of branches and Superintendences of the Bank.

Granting loan FAT Taxi Driver

The Fat Taxi Driver is a loan facility that uses funds from the FAT, managed exclusively by BB, whose purpose is to finance new vehicles, manufactured in Brazil, destined to the renewal of the taxi fleet, which contributes to the generation or maintenance of jobs and income.

BB signed commitment to offer this loan facility with the Decision-Making Council FAT - Codefat, throu-gh the Work Plan of FAT Taxi Driver, pursuant to Resolution 614/09 of Codefat.


4.1.8. Sustainable Agribusiness

The purpose of the program is to increase the availability and access to funds from the rural loan and other sources of financing.

Granting loan to rural producers by Banco do Brasil

Banco do Brasil is historically the principal financial agent of the Brazilian agribusiness, supporting all the production phases, and financing the production costing, the trading and investments, including storage, processing and manufacture of agricultural products.

Banco do Brasil develops actions to improve and optimize its operation in the agribusiness market, mainly:

a) Market monitoring;

b) Partnerships with the government, companies, cooperatives and market entities;

c) Formalization of special agreements of rural integration, in order to meet the higher number of producers;

d) Sponsorship and participation in agricultural fairs and events;

e) Specialized and innovative service provision to rural producers, focused on relationships, business and

digital financial services;

f) Incentive to the use of mechanisms to mitigate risks of price and production;

g) Induction, debureaucratization, simplification, automation and digitalization of processes of contracting of

loan facilities by rural producers of all sizes;

iii. costs incurred





The funds invested derive from the Worker Protection Fund, pursuant to Resolution No. 614/09, upon creation of the loan facility, whose allocation is made through special remunerated deposit.

It is maintained the monitoring of the portfolio of operations gran-ted in the line FAT Taxi Driver, where BB currently generates a volume around R$ 300 million, whose situations are verified by the Bank at the phase of granting as well as in the conduction and collection from clients.

The financial charges of the line is defined by the Codefat, on the basis of item VIII of Resolution No. 614/09, which introduced the loan facility, and is composed of the basic compensation of 100% of TLP and additional fee of interest equivalent to 4% effective per year, as compensation of the financial agent.


h) Operation through resales of agricultural machines contracted as Commercial Correspondents – Agribusi-ness Segment, which facilitates the origination of financing proposals for investment at the moment of purchase of machines and equipment by rural producers.

The coverage of investment proposals of the public of Corporate Agriculture is also directed to the source BNDES/Finame, in complement to the use of own funds. Contracted operations backed by that bank are not object of this report.

The Bank’s performance portrays the agribusiness scenario and BB’s commitment to increase the coverage of the Brazilian agriculture, of which it is the greatest lender.

Granting loan to medium rural producers

The purpose of the National Program of Support to Medium Rural Producers — Pronamp is to promote the development of rural activities of medium producers and to enable the increase of income and creation of jobs in rural areas.

The financing conditions are established in line with the objectives of Pronamp and are differentiated, mainly in regard to interest rates lower than those practiced with other clients of corporate agriculture. The Bank carries out actions for the strengthening of Pronamp, mainly:

a) Mandatory targeting to cover the costing needs of medium rural producers for the lines of Pronamp;

b) Expansion of the operating model through resales of agricultural machines contracted as Commercial




iii. costs incurred




Granting loan to rural producers by Banco do Brasil


Not applicable.

Funding, administrative and tax costs.





Correspondents — Agribusiness Segment, which enhances the offer of the investment lines from Pronamp and facilitates the origination of financing proposals at the moment of purchase of machines and equipment by medium rural producers.

The years 2016 and 2017 were characterized by a few difficult situations in the agribusiness market. First due to uncertainties of the rural producer as to the Brazilian economic scenario, which have led to greater conservatism in investments. In addition, the crisis in cattle-raising crisis and export in the middle of year 2017 affected directly the medium rural producer, target public of Pronamp. Both factors have affected the attainment of the goal.

Loan facilities for financing of Agriculture of Low Carbon Emission (ABC)

The purpose of the program is to finance sustainable systems of agricultural production with capacity to reduce/sequester emissions of Greenhouse Gases (GEE), in addition to promote the production of vegetation/biomass, the production of food and preservation of environment.

However, in prior period, there has been a market slowdown, which reflected on retraction in the volume of agricultural investments, indicating a postponement, by the producers, of decisions for technological and structural renovations in the activities. In special, the ABC projects were strongly affected by this period of waiting for economic recovery prior to making new investments.




iii. costs incurred




Granting loan to medium rural producers


Not applicable.






Granting loan to Cooperatives and AssociationsBanco do Brasil maintains more than 5 thousand Cooperative account holders from all the 13 types of coopera-tivism, mainly agricultural and loan cooperatives, for which specific business solutions are offered.

Agricultural cooperatives are offered customized products and services, for short-term operations (costing, sale and manufacture), as well as for medium and long-term operations (financing of investments).

As to financing of investments, the highlights are Prodecoop – Program of Cooperative Development for Aggregation of Value to Agricultural Production and the PCA – Program for Construction and Expansion of Warehouses.




iii. costs incurred




Loan facilities to financing of Agriculture of Low Carbon Emission (ABC)


Not applicable.








iii. costs incurred


Granting loan to Cooperatives and Associations


Not applicable.




4.2. Funds for Costing of Public PoliciesThe operation of Banco do Brasil in support to the federal budgetary execution, in the capacity of official finan-cial agency of foment, is carried out through granting of loans and financings at differentiated rates, backed by funds from the Fiscal Budget and Social Security (OFSS) in addition to own funds. These policies and respecti-ve objectives are described below.

Midwest Constitutional Financing Fund (FCO)

The FCO aimed to contribute to the economic and social development of the Center-Western region of Brazil, is the principal instrument of financing of the National Policy of Regional Development (PNDR) for the Center West.

The funds from the FCO loan portfolio are backed by onlendings made by the National Treasury to the Bank derived from tax collection of the Federal Government, particularly 0.6% of the proceeds from the collec-tion of Tax on Income and Payments of any Type (IR) and Tax on Manufactured Products (IPI).

Fund for Development of the Amazon (FDA)

The purpose of the FDA is to ensure funds for investments in the area of operation of the Superintendence of Development of the Amazon (Sudam), in infrastructure and public services and in production projects of large capacity of germination of new business and production activities.

In 2017, Banco do Brasil conducted an operation with funds from the FDA, which generated benefits to the sector of production of vegetable oils and whose settlement was also made in the same year.The funds from the FDA loan portfolio are backed by onlendings made by Sudam upon release of loans to the borrowers.

Fund for Development of the MidWst (FDCO)

The purpose of the FDCO is to ensure funds to investments in the area of operation of Sudeco, in infrastructure, public services and production projects of large capacity of germination of new business and production activi-ties.

The funds from the FDCO loan portfolio are backed by onlendings made by Sudeco upon release of loans to the borrowers.






Fund for Development of the Northeast (FDNE)

The purpose of the FDNE is to ensure funds to investments in the area of operation of the Superintendence for Development of the Northeast (Sudene), in infrastructure, public services and production projects of large capa-city of germination of new business and production activities.

The funds from the FDNE loan portfolio are backed by onlendings made by Sudene upon release of loans to the borrowers.

Fund for the Merchant Marine (FMM)

The purpose of the FMM is to provide funds for the development of the Merchant Marine and the Brazilian industry of ship building and repair.

The funds from the FMM loan portfolio are backed by onlendings made by the Department of Fund for the Merchant Marine, agency linked to the Ministry of Transportation, upon release of loans to the borrowers.

Fund for Land and Land Reform – “Banco da Terra” (FTRA)

The purpose of the FTRA is to finance Programs of land rearrangement and rural settlement, whose manage-ment body is the Special Secretariat for Family Agriculture and Agrarian Development (Sead) of the Civil Office.

The funds from the FTRA are transferred to borrowers as debit of available funds established from onlendings made by the BNDES, authorized by Sead, compatible with the demand for financing over the year. The loans are managed by the Bank and returned to the Federal Government in the month following the amorti-zation of debt by the borrowers.

Fund for Defense of the Coffee Economy (Funcafé)

The Funcafé was created for the financing, modernization, incentive to productivity of the coffee growing, the coffee industry and the export, research development, transportation means and ways, ports, defense of prices and domestic and foreign markets, as well as the conditions of rural workers’ life.

The funds from the Funcafé loan portfolio are backed by onlendings made by the Ministry of Agricultu-re, Cattle Raising and Supplies based on the demand informed by the Bank for the crop.

Export Financing Program (Proex)

The purpose of the Proex is to improve the loan policy focused on foreign trade, in order to increase the use of financing instruments and official guarantee to export and to increase the international competition of the Brazi-lian companies.

The program is the principal public instrument of support to Brazilian exports of goods and services, and the funds derive from the Special Program of Official Loan Operations. BB operates on exclusive basis as financial agent of the Federal Government responsible for the management of the Program.


5. Economic and financial impacts of the operationalizationof public policiesThe National Treasury released to Banco do Brasil, in the year 2017, R$ 4.7 billion to funds and programs desti-ned to the costing of loans and financings granted with funds derived from the OFSS, where the FCO, PROEX and FMM accounted for 88.65% of this total.

The value returned to the National Treasury, in the same period, in connection with the portions of return of financing (principal restated), totaled R$ 2,919 million. The total balance of the portfolio of loans and financing is R$ 45,259 million in December 2017, as shown in the table below:

Table 1. Funds from the OFSS – Values Released and Returned to the TN (in R$ Million)

The funds from the Proex loan portfolio are backed by onlendings made by the National Treasury based on the expected demand informed by the Bank.

National Program of Strengthening of the Family Agriculture/National Treasury (Pronaf/TN)

The purpose of the program is to promote the sustainable development of the rural segment composed of family farmers.

The National Treasury transfers funds to BB directly from the General Budget of the Federal Govern-ment (OGU), in the scope of Official Loan Operations, which are destined to financing backed by the Program. The Bank operates as provider of services and carries out operations with risk of the Federal Government.

The returns of values not invested were deducted from the value transferred by the TN.

Detailed information on the operation of the Bank in the capacity of official financial agency of foment is availa-ble on the internet page of the Ministry of Transparency and the General Treasury of the Federal Government, in the section that addresses the Accountancy of the Brazilian President (PCPR).

In rural and agribusiness financing, BB uses 79% of own funds (mainly rural savings, Agribusiness Loan Notes – LCA and demand deposits). In addition to these, the Bank also transfers funds from Constitutional Funds, such as the Center-Western Constitutional Fund (FCO) and the Fund for Defense of the Coffee Economy (Funcafé). The table below shows this stratification:

FCOFDAFDCOFDNEFMMFTRAFuncaféProexPronaf/TN

Total

Fundo/ProgramaValor Repassado peloTesouro Nacinal (a)

Valor Restituído peloTesouro Nacinal (b)

Fluxo 2017(a - b)

Saldo da Carteira(Dez/17)

2.319,80,0

263,9176,5675,320,09,4

1.143,860,0

4.688,6

0,0100,227,1

270,2550,1123,6400,9

1.385,6861,3

2.919,0

2.319,8-100,2236,7-93,7125,2

-103,6-391,5-241,8

-1,3

1.749,7

27.169,50,0

1.181,82.030,78.446,92.195,8

606,72.097,71.529,9

45.258,8


Table 2. Agribusiness Loan Portfolio Expanded View by Funding Sources

To make the financing at differentiated interest rates feasible, covering funding costs, the loan risk, administrati-ve and tax costs and the profitability of the Bank, the National Treasury and the Central Bank may authorize the equalization of rates and the weighting factor.

Rural and agribusiness financing may be divided into equalizable and non-equalizable funds. The distribution of these volumes may be visualized in the table below:

Table 3. Equalizable resources in the Agribusiness Portfolio

The equalization, type of economic subsidy, introduced by Law No. 8.427/1992, represents the differential of rates between funding cost, plus administrative and tax costs to which the official financial institutions and cooperative banks are subject, in their active operations, and the charges collected from the final borrower of the rural loan, pursuant to articles 1, I and II, and 5 of Law No. 8.427/92.

The Weighting Factor is the multiplier adopted by the Federal Government to invest funds derived from demand deposits and rural savings. Through this mechanism, the banks are authorized to meet a lower rate of demandability of investment of funds in rural loan, which allows the released amount to be invested in opera-tions at market rates, in order to offset the differential of profitability derived from the interest rate paid by the final borrower on rural loan operations with incentive from the government.

The volumes of income from equalization received and receivable by Banco do Brasil are detailed in tables 4 and 5. We point out the cut-away for the portfolio of equalizable funds, already presented in table 3.

1 - National Treasury, Funcafé, Rural Product Bill and Guarantees.


6. Internal Control Structure and Management of RisksBanco do Brasil has a set of specific policies for management of risks. The processes are reviewed on annual basis, considering those incurred in the many business segments exploited by the Conglomerate. The model of governance of risks involves structure of superior and executive committees, with the participation of several areas of the Bank.

The Management of Banco do Brasil is responsible for establishing, maintaining and improving the internal controls related to the consolidated financial statements. These controls observe the policies and procedures introduced to ensure that the financial statements fairly present the asset and liability operations, the guarantees provided, the positions maintained and held in custody by the Bank and the consolidation of the other companies of the Conglomerate. The responsibility for the management of BB’s internal controls is clearly established and assumes an integrated and coordinated operation of funds.

Table 4. Income from Equalization and Weighting Factor

Table 5. Equalization Revenues Flow ¹

Additional information on the internal control structures and management of risks is available at section 5 of the Reference Form (at bb.com.br/ri > Downloads > Reference Form).

1 – Source: Note 12.b.


7. Risk factorsThe potential purchasers of marketable securities of the Bank should carefully consider the related specific risks. Accordingly, Banco do Brasil exposes the risk factors that may influence the investment decision, in special, those related to the issuer and its controlling shareholder, subsidiaries and affiliates, suppliers and clients, with the sectors of the economy where the issuer operates and its respective regulation and social and environmental issues.

Additional information on risk factors is available at section 4 of the Reference Form (at bb.com.br/ri > Down-loads > Reference Form).

8. Economic and Financial Data The Management Discussion and Analysis Report (available at bb.com.br/ir > Downloads > MD&A) presents the economic and financial status of Banco do Brasil. The report is intended for market analysts, shareholders and investors and is quarterly.

The publication provides content with data on economic indicators, performance of B’'s papers and risk management, as well as tables with historical series of up to eight periods of the Summarized Balance Sheet, Income Statement with Reallocations, information on profitability, productivity, quality of loan portfolio, capital structure, capital market and structural data. At the end of the report, Financial Statements and Explanatory Notes for the period under analysis are presented.

Information on Banco do Brasil’s economic and financial data under IFRS can be found in section 3 of the Reference Form (available at bb.com.br/ir > Downloads > Reference Form).

8.1. Comments on the Operational PerformanceThe members of the Board of Executive Officers of Banco do Brasil, pursuant to CVM Instruction 480/09, com-ment on section 10 of the Reference Form the Bank's main aspects, retrospectively to 2015, 2016 and 2017, stating that the information is true, complete and consistent.

Initially, the financial and equity conditions of the Bank, its capital structure, sources of financing and its levels of indebtedness are presented. The most significant changes in the Balance Sheet – BS between 2017/2016 and 2016/2015 are also disclosed. The commented performance is based on the International Financial Reporting Standards (IFRS), issued by IASB and the predecessor bodies.

Next, the formation of the results of Banco do Brasil is presented, based on vertical and horizontal analyzes of DRE, which show: (i) Interest Income; (ii) Interest Expenses; (iii) Net Expenses with Provision for Losses on Loans to Customers; (iv) Non Interest Income and Expenses.

Finally, the budgeted and realized amounts of the items related to advertising and marketing expenses and promotions and sponsorship are presented.

Detailed comments of the management on the performance of Banco do Brasil can be found in section 10 of the Reference Form and information on the estimates (projections) for the year 2017 can be found in section 11.1 and 11.2 of the Reference Form (available at bb.com.br/ir > Downloads > Reference Form).


9. Stock Ownership StructureBanco do Brasil’s shares (BBAS3) remained in all B3 trading sessions and represented 3.3% of Ibovespa index for the four-month period from September to December 2017. The Bank also maintained a level 1 ADR program (BDORY) traded in the over-the-counter market in the United States.

The stock ownership structure, on 12.31.2017, is represented by the following figure:

Figure 1. Banco do Brasil’s Stock Ownership Structure


10. Corporate governance policies and practices The administrative structure of Banco do Brasil is established in its Bylaws and internal regulations of its gover-ning bodies, available on the Investor Relations website (bb.com.br/ir > Corporate Governance). In addition, the Bank also makes available on its website the Code of Corporate Governance, which presents an overwiew and simplified view on the principles and practices of the company, as shown in the following figure:

Figure 2. Corporate Governance Structure of Banco do Brasil

The following are the Banco do Brasil’s management bodies, composed of Brazilian citizens with recognized knowledge, including the best Corporate Governance practices, experience, good character, unblemished reputation and technical capacity compatible with the position:

I. The Board of Directors, which has, in the manner prescribed by law and in the Bylaws of Banco do Brasil, strategic, guiding, elective and auditing functions, not including operational or executive functions, whose mem-bers are elected by the General Meeting; and

II. the Board of Executive Officers, responsible for the administration of the Bank, composed of the Board of Directors and the other Executive Officers, all residing in the Country, as established in the Bylaws.

In addition, the following bodies are part of the governance structure of Banco do Brasil:

I. Audit Committee, whose purpose is to advise the Board of Directors regarding the exercise of its audit and supervisory functions and to express its opinion on: (I) the quality of the financial statements; (II) the effective-ness of the internal control system; and (III) the effectiveness of the internal and independent audits;

II. Compensation and Eligibility Committee, whose purpose is to assist the Board of Directors in establishing the compensation policy and the policy of appointment and succession of management members of Banco do Brasil;

III. Risk and Capital Committee, whose purpose is to advise the Board of Directors regarding the exercise of its functions related to risk and capital management, in a unified manner, for the institutions that are part of the Prudential Conglomerate of Banco do Brasil; and

IV. Fiscal Council, whose roles are established by article 163 of Law 6.404/76.


10.1 Other Committees In order to involve the organizational units in the definition of guidelines and approval of proposals for BB’s different businesses, the management uses strategic committees, which are activated within the Board of Executive Officers, which decide on matters of corporate scope and guarantee agility and safety to the process of decision-making.

The main strategic committees are: Superior Committee on Risk Management, Assets, Liabilities, Liquidity and Capital (CSGRC); and Executive Committees of: Risk Management and Internal Controls; Asset Management, Liabilities, Liquidity and Capital; Customer Service and Experience; Profitability and Performan-ce; Disclosure; Business; Governance of Related Entities; People Management; Ethics and Discipline; Loan Limit; Operations; Administrative-Operational; Strategic Portfolio Management; and Prevention of Financial and Currency Violation and Information Security.

Further information on the structure and governance policies and composition of Banco do Brasil’s manage-ment can be found in section 12 of the Reference Form (available at bb.com.br/ir > Downloads > Reference

Form).

The following are the Banco do Brasil’s management bodies, composed of Brazilian citizens with recognized knowledge, including the best Corporate Governance practices, experience, good character, unblemished reputation and technical capacity compatible with the position:

I. The Board of Directors, which has, in the manner prescribed by law and in the Bylaws of Banco do Brasil, strategic, guiding, elective and auditing functions, not including operational or executive functions, whose mem-bers are elected by the General Meeting; and

II. the Board of Executive Officers, responsible for the administration of the Bank, composed of the Board of Directors and the other Executive Officers, all residing in the Country, as established in the Bylaws.

In addition, the following bodies are part of the governance structure of Banco do Brasil:

I. Audit Committee, whose purpose is to advise the Board of Directors regarding the exercise of its audit and supervisory functions and to express its opinion on: (I) the quality of the financial statements; (II) the effective-ness of the internal control system; and (III) the effectiveness of the internal and independent audits;

II. Compensation and Eligibility Committee, whose purpose is to assist the Board of Directors in establishing the compensation policy and the policy of appointment and succession of management members of Banco do Brasil;

During the 2017 financial year, the Bank adjusted its governance structure to Law 13.303/2016 (State-Owned Companies Law), one year in advance of the period set out by the legislation.

Among the improvements in the corporate governance structures and practices that occurred in the last fiscal year, the following stands out: review of the Bylaws; creation of the Policies of Transactions with Related Parties, Appointment and Succession of Management Members and Compensation to Shareholders; review of the Code of Ethics and Standards of Conduct; review of the Corporate Governance Code; and enhancement of the content of the Reference Form. These documents are also available on the Investor Relations website.

Listed in the Novo Mercado since 2006, Banco do Brasil obtained another important recognition on August 2017, with the certification by Brasik, Bolsa, Balcão – B3, of the State-Owned Companies’ Governance Highlight Program, developed by B3 with the objective of encouraging the state-owned companies to improve their corporate governance practices and structures.

Approximately two months after being certified as State-Owned Companies’ Governance Highlight, the Secretariat for Coordination and Governance of State-Owned Companies (Sest), linked to the Ministry of Plan-ning, Development and Management, granted the Banco of Brasil the Level 1 Seal in the Governance Indicator – IG-Sest with maximum score (10), in all Dimensions evaluated.

The purpose of IG-Sest is to monitor the performance of the governance of federal state-owned compa-nies, in order to measure compliance with the requirements of the State Law and its regulatory decree, in addi-tion to the guidelines established in the CGPAR Resolutions, seeking compliance with best practices in the market and greater level of excellence in corporate governance.

III. Risk and Capital Committee, whose purpose is to advise the Board of Directors regarding the exercise of its functions related to risk and capital management, in a unified manner, for the institutions that are part of the Prudential Conglomerate of Banco do Brasil; and

IV. Fiscal Council, whose roles are established by article 163 of Law 6.404/76.


10.2 Management members’ compensation policy or practice

The compensation policy for BB’s management members is regulated by Law no. 6.404/76, Law no. 13.303/16, Decree no. 3.255/99, Decree no. 89.309/84, CMN Resolution no. 3.921/10, Law no. 12.813/13 and Bylaws of Banco do Brasil and aims to

• reinforce commitment to corporate strategies, increase BB’s results and recognize the efforts of each management member, in proportion to the achievement of the goals;

• reconcile the Variable Compensation Policy to the Risk Management Policy, so as not to encourage behaviors that increase the risk exposure above levels considered prudent in the Company’s short, medium and long-term strategies;

• directly contribute to the scope of the guidance, as it is made up of several performance indicators that are derived from the ECBB, the Market Plan and the Master Plan.

The compensation and other benefits of the members of the Board of Directors comply with the legal regula-tions and is fixed annually by the Shareholders’ Meetings , whose minutes are available on the Investors Rela-tion website (bb.com.br/ir > Information to the Market > Meetings).

Values are defined based on market research, internal balance, responsibility, company and individual performance, among other factors. The total compensation includes fixed compensation, variable compensa-tion and benefits.

The Board of Executive Officers’ Variable Compensation Program aims to recognize the efforts of managers in building the results achieved, based on the performance verified by indicators linked to corporate strategy. The Program is proposed by the Compensation and Eligibility Committee, approved by the Board of Directors and subsequently submitted to the Ministry of Planning, Development and Management/Sest, throu-gh the Ministry of Finance. The payment method follows the definitions proposed by CMN Resolution no. 3.921/10, among which the payment in shares of the Company stands out.

It should be emphasized that the composition of the compensation granted to the members of the Board of Executive Officers is in accordance with the legal provisions regarding state-owned companies and corporations and aims to reward them for the degree of responsibility of their positions and for the trust inherent to them, as well as the value of each professional in the market, considering the Company’s Risk Management Policy, its results and the economic environment in which it is inserted.

For the members of the Board of Directors and the Fiscal Council, the amount of fees is set at 10% of the average monthly compensation of the Board of Executive Officers, according to Law 6.404 /76 and Law 9.292/96, excluding amounts related to vacation premiums and benefits, the payment of interest, of any kind, in the profits of the company being prohibited.

The table below details the compensation of the management members segmented by the management body of Banco do Brasil:


Table 6. Remuneration of the Management members

The table below presents additional information regarding the compensation of the board of directors, the fiscal council and the executive board:

Table 7. Remuneration of the Management Members – Higher amount, lower amount and average amount of compensation

For further information on management members’ compensation policy or practice, refer to section 13 of the Reference Form (available at bb.com.br/ir > Downloads > Reference Form).

1. It corresponds to the total annual compensation paid to the Chief Executive Officer of Banco do Brasil in 2017. Since the current Chief Executive Officer did not hold a position on the Executive Board before its vesting of possession in 2016, he was informed of the compensation of a Vice President, including the direct and indirect benefits, the social charges levied on its compensation, according to items "b" and "j" of subheading 10.2.13 of the Official Letter/CVM/SEP/no.02/18.

2. It corresponds to the total annual compensation paid to an Executive Officer of Banco do Brasil in 2017, including the direct and indirect benefits and social charges levied on its compensation, according to items "b" and "j" of the subheading 10.2.13 of the Official Letter/CVM/SEP/no.02/18. The amount of the lowest individual annual compensation was calculated based on the total compensation received by a statutory management member who held the position for 12 months.

3. The average amount calculated for the Board of Directors is R$ 398.043,70 by4.92, for the Fiscal Council is the ratio R$ 384.863,43 by 4.58 and the Board of Executive Officers is the ratio of R$ 57.421.342,17 by 44.83. The divisors correspond to the number of paid members.

DECLARATION OF THEBOARD OF DIRECTORS

Banco do Brasil S.A. Board of Directors declares that, in a meeting performed at this date, approved the Annual Chart of Public Policies and Corporate Governance related to the fiscal year ended 2017, in compliance with the item I of Article 8 of Law 13,303, from June 30, 2016.

May 21, 2018.

Fabrício da Soller

Daniel Sigelmann

Fabiano Felix do Nascimento

Luiz Serafim Spinola Santos

Beny Parnes

Julio Cesar Costa Pinto Paulo Rogério Caffarelli

Luis Otávio Saliba Furtado

i annual chart 2017 position 12/31/2016 rule 12g3-2(b ... · provides qualitative and quantitative...

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